The recent advent of radiofrequency (RF) catheter ablation as a curative therapy for supraventricular tachyarrhythmias has challenged the role of long term drug treatment, which is essentially a palliative therapy. To date, however, no data have been published on the cost-effectiveness of RF ablation as compared with drug treatment in the Australian setting.The study aimed to compare actual and projected costs of these two treatment options in a consecutive group of patients having RF ablation as treatment for symptomatic tachyarrhythmias.The cost effectiveness of RF catheter ablation was assessed in 26 patients having RF ablation, using a hypothetical model of continued drug therapy in the same group of patients. A 'cost saving' criterion was used for cost effectiveness. Actual costs for the RF ablation and for continued drug therapy were based on data from medical records and from the answers to a detailed patient questionnaire. Analysis included costs of prior diagnostic electrophysiology (EP) study (17/26 patients), general anaesthesia (GA: 20/26 patients), post-ablation echocardiography (10/26 patients), and late follow-up EP study (7/26 patients). The in-hospital stay for the RF ablation was two days in all cases, and no patient required implantation of a permanent pacemaker. The RF ablation procedure was successful in 23/26 patients (88.5%) with late recurrence of tachycardia in one patient. After a median follow-up of nine months, 22/26 patients no longer require antiarrhythmic drug therapy.The mean per patient cost of RF ablation was $4067 in the study group. This reduces to $2546 if prior EP study and GA are excluded. The mean per patient cost of continued medical therapy was $700 per year. Extrapolating over 20 years and allowing for an annual 5% inflation factor, RF ablation becomes cost saving in 5.5 years (3.8 years if prior EP and GA are excluded). Over 20 years, continued drug therapy would be four to five times more expensive than RF ablation in the patient study group. We consider RF ablation to be a cost-effective alternative to long term drug therapy in patients with supraventricular tachyarrhythmias.